Rockwell Collins to Buy ARINC From Carlyle Group For $1.39B

Aviation and military electronics-maker Rockwell Collins (NYSE: COL) agreed, on Sunday, to acquire ARINC Inc from the Carlyle Group (NASDAQ:CG), for $1.39 billion.

The acquisition will help Cedar Rapids, Iowa-based Rockwell Collins to shift its reliance from government contracts to commercial works. After the completion of the deal, the composition of Rockwell Collins' business will shift so that 54 percent of its contracts come from the private sector while 46 percent will be from government contracts.

“ARINC’s strong customer base, high customer retention rates and subscription business model will help the company achieve accelerated growth and benefit from greater earnings consistency throughout the commercial aviation business cycle,” Kelly Ortberg, CEO and President of Rockwell Collins said, in a statement.

Annapolis, Md.-based ARINC mainly serves the aviation industry such as managing airport operations, air-traffic control systems and air-safety data. Rockwell Collins provides avionics and products and services used in-flight by airline companies.

"Strategically, this acquisition is a natural fit for Rockwell Collins. It accelerates our strategy to develop comprehensive information management solutions by building on our existing information-enabled products and systems and ARINC's ground–based networks and services to further expand our opportunities beyond the aircraft,” Ortberg said.

The Washington, D.C.-based Carlyle Group had purchased ARINC, in October 2007 from airline companies, which had owned ARINC since its inception in 1929. The company has about 3,200 employees and operates at more than 120 locations worldwide, according to Rockwell Collins.

ARINC is expected to post more than $600 million dollars in revenues this year, while Rockwell had said it expects its sales in the current fiscal year to touch $4.65 billion. Rockwell Collins shares closed down 0.3 percent at $74.42 on Friday.